Abstract:
This paper proposes a quantitative analysis of extra-virgin olive oil¡¯s market designed to study the intra-sector competition and to analyze the profitability of pricing strategies for different types of companies: small producers, large manufacturers and Private Labels. The analysis focuses on trade within the modern grocery sector, which represents the first distribution channel of extra-virgin olive oils at the national level. The study refers to the theory of industrial organization and, through the demand estimation, measures the price-cost margins. The most important results relate to the concerns of the smaller producers¡¯ respect to Private Labels, big and international companies in the event of a further fall of extra-virgin olive oil¡¯s prices. Implications address policy makers to strengthen product differentiation policies coupled to collective branding, and give further support to vertical integration and cooperation.